{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

cash and current recievables - CASHANDRECEIVABLES I Flows....

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
CASH AND RECEIVABLES  I. Cash and Cash Equivalents are combined on the Balance Sheet and Statement of Cash  Flows. This fact must be footnoted in the Summary of Accounting Principles A. Cash-medium of exchange available for immediate use 1. Currency and coins                              2. Balances in bank accounts. If restricted, the balances are investments, not  cash                              3. Undeposited receipts  such as checks and money orders from customers, if  not                                           postdated B. Cash equivalents are short-term, highly liquid investments that can be readily  converted to cash.  1. Money market funds 2. Treasury bills 3. Commercial paper 4. Bank CD’s II. Internal Control  A. General 1.  Encourages adherence to company policies and procedures 2. Enhances the reliability and accuracy of accounting data  3. Promotes operational efficiency  4. Minimizes errors and theft 
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
B. Internal Control Procedures  for cash    1. Separate responsibilities for handling cash, recording cash transactions, and  reconciling cash balances. 2. Match the amount of cash received with the amount of cash deposited.  3. Close supervision of cash-handling and cash-recording activities. III. Accounts Receivable- Trade Amounts due from customers for credit sales. A. Credit sales require: 1. maintaining a separate account receivable account for each customer. 2. accounting for bad debts and sales returns that result from credit sales 3. Credit sales and the resulting accounts receivable are recorded net of trade  discounts, not at list price. B. Cash Discounts  - 2/10,n/30                     Discount percent                    Number of days discount is available                    Otherwise, net (or all) is due                     Credit period C. Gross Method                    Sales are recorded at the invoice amounts.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern